Exhibit 10.4
GUARANTY OF
COLLECTION
THIS GUARANTY OF COLLECTION (the
“Guaranty”) is made as of March 22, 2007, by JOHN
WOODALL (the “Guarantor”) to and for the benefit of AJW
PARTNERS, LLC (“AJW Partners”), AJW OFFSHORE, LTD.
(“AJW Offshore”), AJW QUALIFIED PARTNERS, LLC
(“AJW Qualified Partners”), and NEW MILLENNIUM CAPITAL
PARTNERS II, LLC (“New Millennium” and together with
AJW Partners, AJW Offshore and AJW Qualified Partners,
“NIR”).
R E C I T A L S
:
A. NIR is willing to purchase
callable secured convertible notes of Greens Worldwide
Incorporated, an Arizona corporation (“Borrower”), in
the aggregate principal amount of $7,807,500, pursuant to that
Securities Purchase Agreement dated as of the date hereof among
Borrower and NIR (the “Notes”), provided NIR receives a
guaranty of collection from the Guarantor with respect to the
Liabilities (as defined below).
B. The Guarantor will benefit from
the Notes and desires to induce NIR to extend the credit to
Borrower.
NOW, THEREFORE, to induce NIR from
time to time, in its sole discretion, to extend or continue credit
to Borrower and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Guarantor agrees with NIR as follows:
1. Guaranty . The Guarantor
guarantees to NIR full and prompt collection of up to $625,000 of
all outstanding principal amounts due under the Notes, but not any
interest, fees, or other amounts of any kind whatsoever that shall
be due to NIR by Guarantor (the “Liabilities”). As used
in this Guaranty, the term “Liabilities” does not
include any liability of Borrower to NIR other than the obligations
of Borrower under the Notes with respect to up to $625,000 of the
outstanding principal amount only and any renewals, extensions or
modifications of the Notes with respect to up to $625,000 of the
outstanding principal amount only.
2. Guaranty of Collection .
This is a guaranty of collection only, and not a guaranty of
payment. Before enforcing this Guaranty, (i) NIR first must
foreclose upon any collateral securing the Notes, (ii) NIR
must use reasonable efforts to obtain judgment against Borrower and
any guarantors of payment (“Payment Guarantors”) of the
Liabilities, (iii) NIR must use reasonable efforts to execute
on any judgment obtained against Borrower (but not any Payment
Guarantors), and (iv) following execution, a portion of the
sums due under the Notes must remain unpaid (a “Deficiency
Amount”); provided, however , if Borrower becomes the
debtor in any voluntary or involuntary bankruptcy case, then NIR
immediately may enforce this Guaranty against Guarantor.
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3. Termination of Guaranty .
This Guaranty shall remain in effect and will not terminate until
the Liabilities have been paid in full.
4. Waivers . The Guarantor
waives (i) notice of acceptance of this Guaranty,
(ii) all presentments and protests, and (iii) notice of
dishonor.
5. Obligations Absolute .
Except as set forth in this Guaranty, the Guarantor’s
obligations are in all respects absolute and unconditional and will
not be impaired, modified, released or limited by any occurrence or
condition whatsoever, including, without limitation, (i) any
modification, discharge, renewal or extension of the Liabilities or
the Notes, or any amendment, modification or stay of NIR’s
rights under the Notes which may occur in any bankruptcy or
reorganization case or proceeding concerning Borrower, whether
permanent or temporary and whether or not assented to by NIR,
(ii) any notice of withdrawal of this Guaranty, at any time
and from time to time before, at or after maturity, (iii) any
substitution or exchange, in whole or in part, of any collateral or
any security held in connection with the Notes, (iv) any
furnishing of additional collateral for the Notes, (v) any
determination that any collateral has become impaired or that any
security interest taken by NIR to secure the Notes is invalid or
unperfected, (vi) any determination that any signatures on
behalf of Borrower on the Notes are not genuine or that the Notes
are not the legal, valid and binding obligation of Borrower, or
(vii) any defenses which Borrower may have as to any sums due
under the Notes.
6. Subordination of
Borrower’s Obligations to the Guarantor . The Guarantor
subordinates all obligations of Borrower owing to the Guarantor,
whether now existing or hereafter arising, to the Liabilities.
Following the occurrence of any event requiring payment under this
Guaranty, any payments made by Borrower to the Guarantor will be
deemed to be held in trust by the Guarantor for NIR and will be
paid over to NIR on account of the Liabilities without reducing or
affecting in any manner the liability of the Guarantor under this
Guaranty except to the extent of such payment.
7. Waiver of Subrogation .
Until the Liabilities have been paid in full, the Guarantor
irrevocably waives, relinquishes and renounces any right of
subrogation, contribution, indemnity, reimbursement or any claim
whatsoever which the Guarantor may have against Borrower, any
Payment Guarantor or any other guarantors liable on the Notes
arising out of, or in any way connected with, the documents
evidencing, securing, guaranteeing or otherwise relating to the
Notes (the “Loan Documents). The Guarantor will not assert
any such claim against Borrower, any Payment Guarantor or any such
guarantor, in any proceeding, legal or equitable, including any
bankruptcy, insolvency or reorganization proceeding, before NIR is
paid in full for the Liabilities. This provision will inure to the
benefit of and will be enforceable by NIR, Borrower and any such
guarantors, and their successors and assigns, including any trustee
in bankruptcy or debtor-in
